One of Wintery Knight's recent blog posts on how a minimum wage hike will actually raise unemployment seems to be what most economists think about a minimum wage. Policymakers try to create a "great society" when making and enforcing a minimum wage law, but is the product of such a policy anything "great" for society?
CATO Institute wrote:
"If the government requires that certain workers be paid higher wages, then businesses make adjustments to pay for the added costs, such as reducing hiring, cutting employee work hours, reducing benefits, and charging higher prices. Some policymakers may believe that companies simply absorb the costs of minimum wage increases through reduced profits, but that’s rarely the case. Instead, businesses rationally respond to such mandates by cutting employment and making other decisions to maintain their net earnings. These behavioral responses usually offset the positive labor market results that policymakers are hoping for."
Uh-huh. This just makes sense. So, it seems, from reading the studies we can reasonably say that a minimum wage (especially a high minimum wage) reduces the younger workforce number and actually hurts the consumers of businesses that typically have a large number of "minimum wage employees" because those businesses will raise the prices on the goods they're selling.
That's not all! Consider Wintery Knight's closing statement on his blog post.
"You can read more about minimim wage and unemployment from my second favorite economist Walter Williams, and from my first favorite economist Thomas Sowell.
This is an issue that matters to them, because they are both black, and
blacks are the hardest hit by these policies – even though most blacks
support these policies by voting overwhelmingly for socialists.
This issue is simple and straightforward. To help the poorest and
least experienced workers, we have to take away any regulations that
separate them from their first employer. From there, they will
gain the experience to move up. Nobody stays in a minimum wage job all
their lives. They move up when they get experience and a resume. That’s
why that first job is so crucial. We have to make it easier for
employers to get employees started in their careers."
Until I'm given reason to think otherwise, I agree with the Knight. I think because of the reasons above and in the full versions of posts mentioned here we (the U.S.) don't need a higher minimum wage, especially now in this economy.
I recommend reading the PDF from CATO Institute on this topic.